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EMC Corp (NYSE:EMC)
Beneish M-Score
-2.99 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

EMC Corp has a M-score of -2.99 suggests that the company is not a manipulator.

EMC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.85
Current: -2.99

-3.74
-1.85

During the past 13 years, the highest Beneish M-Score of EMC Corp was -1.85. The lowest was -3.74. And the median was -2.77.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of EMC Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8695+0.528 * 1.0032+0.404 * 0.9413+0.892 * 0.9957+0.115 * 0.9732
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0231+4.679 * -0.0826-0.327 * 0.9013
=-2.99

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,896 Mil.
Revenue was 6017 + 5475 + 7015 + 6079 = $24,586 Mil.
Gross Profit was 3736 + 3260 + 4360 + 3705 = $15,061 Mil.
Total Current Assets was $16,550 Mil.
Total Assets was $46,745 Mil.
Property, Plant and Equipment(Net PPE) was $3,725 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,950 Mil.
Selling, General & Admin. Expense(SGA) was $8,414 Mil.
Total Current Liabilities was $11,403 Mil.
Long-Term Debt was $5,479 Mil.
Net Income was 581 + 268 + 771 + 480 = $2,100 Mil.
Non Operating Income was 12 + 17 + 73 + 47 = $149 Mil.
Cash Flow from Operations was 1608 + 932 + 1870 + 1403 = $5,813 Mil.
Accounts Receivable was $3,345 Mil.
Revenue was 5997 + 5613 + 7049 + 6032 = $24,691 Mil.
Gross Profit was 3587 + 3339 + 4505 + 3743 = $15,174 Mil.
Total Current Assets was $14,087 Mil.
Total Assets was $44,867 Mil.
Property, Plant and Equipment(Net PPE) was $3,788 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,903 Mil.
Selling, General & Admin. Expense(SGA) was $8,259 Mil.
Total Current Liabilities was $12,507 Mil.
Long-Term Debt was $5,472 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2896 / 24586) / (3345 / 24691)
=0.11779061 / 0.13547446
=0.8695

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(15174 / 24691) / (15061 / 24586)
=0.61455591 / 0.6125844
=1.0032

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (16550 + 3725) / 46745) / (1 - (14087 + 3788) / 44867)
=0.56626377 / 0.60160029
=0.9413

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24586 / 24691
=0.9957

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1903 / (1903 + 3788)) / (1950 / (1950 + 3725))
=0.33438763 / 0.34361233
=0.9732

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(8414 / 24586) / (8259 / 24691)
=0.34222728 / 0.33449435
=1.0231

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5479 + 11403) / 46745) / ((5472 + 12507) / 44867)
=0.36115093 / 0.40071768
=0.9013

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(2100 - 149 - 5813) / 46745
=-0.0826

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

EMC Corp has a M-score of -2.99 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

EMC Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0431.14970.86820.99281.00450.97221.07691.05161.0860.8916
GMI 1.01370.97250.98611.0010.93660.96930.96841.00770.99891.0282
AQI 1.06980.83831.01811.13871.14640.96271.03850.91131.08850.9975
SGI 1.15431.1861.12440.94281.21311.17591.08531.06941.05251.0108
DEPI 1.06790.91550.92490.99051.03020.94531.0221.010.97780.9995
SGAI 1.08151.01411.04591.05920.96421.0250.99610.97971.03361.0576
LVGI 1.69210.92060.97520.89460.98871.00110.88881.39360.99921.0452
TATA -0.0608-0.0832-0.0943-0.0838-0.0846-0.0887-0.0878-0.0852-0.0808-0.0773
M-score -2.78-2.63-2.94-2.85-2.64-2.81-2.71-2.93-2.71-2.94

EMC Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.01060.98741.01781.0860.9440.95530.95750.89160.99190.8695
GMI 1.00841.00781.00750.99891.00431.01211.01621.02821.02171.0032
AQI 0.99131.12241.07841.08851.04470.99431.02380.99750.95810.9413
SGI 1.05941.0571.06661.05251.0541.04711.02761.01080.99970.9957
DEPI 1.01180.99040.96940.97780.96710.98270.99450.99951.00150.9732
SGAI 0.99851.02111.02141.03371.03641.02421.03881.05751.03891.0231
LVGI 1.29020.9590.95260.99921.09391.15751.131.04520.99390.9013
TATA -0.0846-0.0869-0.0827-0.0808-0.084-0.0802-0.0778-0.0772-0.0748-0.0826
M-score -2.91-2.79-2.75-2.71-2.90-2.91-2.89-2.94-2.85-2.99
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